With acquisition, Under Armour muscles into wearable tech appsNovember 14, 2013: 4:57 PM ET
The Baltimore-based sports company takes a starting position for the coming wearable technology boom.
FORTUNE -- Under Armour wants to equip you with more than running shoes. The sports apparel company, a giant in sports bras and running shoes and cold weather outfits, has just signed a deal worth up to $150 million to buy the app-maker MapMyFitness.
The company's apps include MapMyRun and MapMyRide, which both draw on GPS technology to let the company's 20 million registered users track their workout routes. The company is aiming squarely for the $2.5 billion wearable technologies market.
The arms race for wearable technology is heating up. Right now, wearable computers that measure everything from your sleep patterns to, in the case of MapMyRun, the miles you've run, are still mostly the tools of the early adopters -- super athletes and tech geeks. The technology is imperfect, and the incentives aren't always sufficient to keep us recreational fitness and health buffs hooked.
(At my house alone, we've been through two Jawbone Up bands and two Fitbits; all four devices are parked in a drawer, their wearers having lost interest.)
But if mainstream users are not yet addicted to these devices, we're all at least interested, and growing more so -- that's why the watches and bracelets and widgets were such hot sellers last holiday season. Startups and fitness companies of all types are racing to design better products and, more importantly, services that appeal to a broader group of users and keep us hooked. It's expected the market for wearable electronics will more than triple to $8 billion by 2018, according to research firm MarketsandMarkets.
With this acquisition, Under Armour's ambitious founder and CEO Kevin Plank says he plans to launch a digital hub that will "serve as a destination for the measurement and analytics needs of all athletes." Of course, so does everyone else. Under Armour (UA) is about to go head-to-head with a number of tech startups including Jawbone, which has just launched a new version of its Up band that syncs to a smartphone wirelessly via Bluetooth. Jawbone made several software acquisitions earlier in the year and has recently raised $100 million, mostly in debt financing, to help meet immediate customer demand to hire more engineers to work on its wearable products.
Then there's Fitbit, which offers several versions of its tracker including the Fitbit Force, a wristwatch-like band released in October. In August, the company raised $43 million in a round led by Softbank Capital also to help the company gets its devices into the hands of current consumers.
A bevy of other products are also vying for a position in this market including the Pebble watch (funded on Kickstarter) and Sony's Smartwatch 2. But the most formidable competitor currently in wearable technology is the Goliath to Under Armour's David, Nike.
On November 6, the company released the Nike+FuelBand SE, an update on the original tracking bracelet it launched in February 2012. The first product was a hit immediately with customers; Nike's Equipment division increased profits 18% year-over-year in 2012. And the company has big plans for the future. Nike has announced a new Nike+ Fuel Lab in which 10 partner companies will be given workspace and a budget of $50,000 to build software that integrates with Nike. Nike will get a 3% stake in each company.
Under Armour already sells a chest strap that lets athletes measure heart rate, as well as the Armour39 Watch, a fitness tool that, according to reviews, "could do a lot more." But neither device is much of a competitor among wearable tech buffs. That may change with the company's latest acquisition.